Answers Sought for When Marijuana Laws Collide

A deputy attorney general told the Senate Judiciary Committee on Tuesday that the Justice Department had begun working with Treasury officials and financial regulators to clarify how it legally deals with banks and other businesses that serve marijuana dispensaries and growers in states that have legalized the drug for medical or recreational use.

The deputy attorney general, James M. Cole, said the Obama administration was dedicated to enforcing federal drug laws and was choosing the best among a number of imperfect solutions by relying on states to regulate marijuana “from seed to sale.” The hearing was the first aimed at sorting out differences between state and federal laws since Colorado and Washington State passed measures approving the recreational use of marijuana in November.

Those laws “underscored persistent uncertainty” about how the Justice Department resolves conflicts between state and federal marijuana laws, said Senator Patrick J. Leahy, the committee’s chairman. Financial institutions, security providers and landlords that serve marijuana businesses can be prosecuted for racketeering, money laundering and trafficking under current federal laws, which Mr. Leahy said also hinder states in regulating the banking and taxation of growers and dispensaries.

But Senator Charles E. Grassley of Iowa, the panel’s ranking Republican, said the Justice Department move was a step toward broad legalization of marijuana that would result in disastrous consequences for public safety and might violate international treaties. More broadly, he and other critics said, the Justice Department’s new policy was another example of the Obama administration’s picking which laws to enforce and which to disregard.

Marijuana’s status as an illegal drug “isn’t based on a whim,” Mr. Grassley said. “It’s based on what science tells us about this dangerous and addictive drug.” Mr. Cole responded: “We are not giving immunity. We are not giving a free pass. We are not abdicating our responsibility.” He said the agency would go after marijuana providers who market the drug to children or who try to sell it across state lines.

Advocates for marijuana legalization say a more coordinated effort between states and the federal government would be an improvement over current policies that have failed to rein in drug cartels and reduce violence. The Justice Department said last month that it would not seek to pre-empt the state laws as long as states set up “robust” regulations to keep marijuana operations from running afoul of the agency’s top enforcement priorities, like preventing children and drug cartels from obtaining the drug and prohibiting its use on federal land.

But John Urquhart, who was a police officer for 37 years in Seattle before he became the sheriff of King County, Wash., said states were still handcuffed by not knowing how banks and other financial institutions could conduct marijuana-related business. “I am simply asking the federal government to allow banks to work with legitimate marijuana businesses who are licensed under state law,” he said.

Kevin A. Sabet, a former drug policy adviser in the Obama administration who opposes legalization, said the administration’s decision to rely on states for regulation ignores the Justice Department’s own statements that some marijuana operations had already violated its enforcement priorities. “I just don’t see any of that being regulated, and that’s what I worry about,” he said. Colorado and Washington are among the 20 states and the District of Columbia that allow the use of marijuana for medical reasons or for recreation.

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